Establishing and conducting business relationships in hospitality management

¶ … Business Relationships (Hospitality Management)

Business Relationships in Hospitality Management

Within the hospitality sector of business there is an abundance of contributing factors that influence and dictate success. Hospitality is one of the most competitive fields in the entire market. There exists a degree of management and servicing operation that requires rigorous demand and exceptional consistency. In order to continually keep up with the ever-changing market, hospitality businesses must always be innovating and developing ways of attracting new and returning customers. Diversification must always be in process to keep up with competition and overall interests.

The quality and grade of a hospitality sector business can be determined by the level of professionalism operating it. Most hospitality businesses consist of multi-level ownership, management and staff (Kozak, 1998). In consideration, this fact earns this field a high turnover of employees in every aspect of operation.

Distinguished Aspects of Detrimental Involvement

This particular operation has distinguished five aspects that are detrimentally involved with the overall business objectives. These five aspects are significant contributors to the hindering of profit potentials. As this establishment is under the food hospitality sector, these negativities that exist in all aspects of hospitality are essential for addressing, dissecting and revising. These negative aspects consist highly of the problem previously stated and found commonly in the hospitality market - high employee turnover ratios.

This establishment's turn-over is seen with most regard in the kitchen staff and food and beverage staff. As these employees are the links in the overall chain of operation and conduct, their constant absence, elimination and sometimes, acceptable reprieve has proven to extend the challenges of overall capability. When an employee takes a leap of absence or their employment is permanently terminated due to outside or internal reasons, many things occur across the company board. In every instance, there are undoubtedly costly repercussions.

When staff employees leave, there position must be filled. The task of filling these positions alone takes time and effort. Money must also be spent in order to advertise and inform the public of an open position. A considerable amount of time directed in this area can be justified as a considerable amount of money loss as a result.

Current staff is then burdened with heavier responsibility loads and new routines that they are unaccustomed to. When a position is then filled, it requires the thorough training of the individual/s that fills each position - again accounting for more lost time and revenue. All this in-turn can cause errors of any manner, which negatively determines customer satisfaction opinion. Errors may arise in timely food preparation, unattended patrons, wrongly assigned orders, general periodical delays and other influential situations and occurrences.

The next negative factor that is contributing to the loss of potential and profit may be an effect of the turnover factor previously described. There remains a low level of a consistent customer base with an additional negativity in the low levels of repeat customers. Since much of the hospitality sectors success depends on such business, thee factors are greatly indicative of depleted revenue. A consistent customer base can be the foundation of a restaurants ability to keep the doors open. Consistent customers are the pillars for covering overhead. Beyond them, and the growing of the customer base is the ability to gain profits. Without the consistent customer base, there is little that can be done to grow operations and increase service levels. Hospitality companies must increase their market share and growth rates by maximizing the loyalty of their customers (Tepeci, 1999).

Attracting new customers requires a heavy amount of advertising. Advertising is one of the most effective ways to inform the public of this company. The expenses necessary for exposure through these methods are essential and should be done on a consistent basis. Advertising rates can range all the way into the six figures, even for small businesses taking on moderate levels of advertising. The cost of advertising is a harsh factor in the hospitality sector as it is absolutely necessary.

Other methods of marketing can be useful depending on the creative nature by which they are utilized. A perfect example of strategic marketing within the hospitality market was done back in the mid-1920's when a group of investors sold an extremely large lot of land to Walt Disney for an amazingly low price (Anderson, 2000). The investors did this with the agreement that they could build hotels and restaurants around the area the Disney wished to use. Obviously, the amount of tourism that flocks to Disneyland each year is proof of the intelligence in this marketing move. This example is merely a way of illustrating the creative methods by which a hospitality company can thrive off of the success of another, and such is of consideration for the increase sought at this company.

Another factor influencing the decline of business and its full potential is the inability to establish a competitive edge over competition. When going head-to-head with larger corporation and chain companies, it can be difficult to compete with the lower rates that they offer to customers. Since the marketing and advertising of their conglomerates directly benefits competitors of this type, there is hardly enough budget available to keep up with their output. Customers are more likely to recognize these companies before they recognize one of our proportion, and thus, customers tend to sway in their direction.

In the final negative aspect contributing to the decline of business growth, the concept is relatively and remotely defined by the customer. A trend seems to have arisen in the average spending per individual or group. The average has declined significantly in the overall bill of patrons. This conflict arouses many issues for consideration. Although a patron or patron group takes a lower costing order, the amount of effort and time dedicated to their experience remains at the same cost level. This contributes to the overall loss of profit.

As a direct result of the decline in profit and productivity, the public trading performance has mimicked overall decline. The decline in trading is a drastically damaging aspect of business worth and overall continuation of growth.

Proposed Measures of Modification and Implementation

Considering all of these negative factors, the approach and directive of the next year must be associated accordingly. The strategies and objections designed to counter the negative aspects must be systematically followed and analytically tracked. In order to offset the trends that are proving to destabilize business operation and productivity, the dissection of each trend is discussed and outlined for its plan of action.

With regard to the initial issue of staff turnover, several analysis methods have been examined. Calculating the amount of money that has been spent every year in hiring and training new employees due to turnover has proven to justify the thorough examination of the issue. These amounts are significantly high and have been determined costly enough that if they are redirected into other outlets of use, the turnover may decrease. The astronomical costs could be more efficiently utilized by redirecting them to raise the lowest income levels, or to the income levels where turnover is the highest (Gardinier, 2005). Another method that has yielded positive results for other hospitality companies is through awarding staff according to conduct, productivity, and overall contributions. Whether the reward consists of time-off, bonus pay, or other incentives, it is a method that can unite the employment staff and provide them with a sense of appreciation. These rewards will undoubtedly be significantly lower as compared to the costs associated with continual turnover.

The persistent problem found in the lack of consistent customers and a large decline in the number of repeat customers has been a model for similar analysis. In a recent research study conducted by the Restaurant Hospitality Service Company, consumers where surveyed to determine the frequency of their eating-out habits, including breakfast, lunch and dinner. These results are being discussed as they are pertinent to the evaluation and plan of action that must be taken to increase current status with repeat customers. A key question in all of their surveying regarded what aspects or restaurant characteristics make them want to return to a certain restaurant. The study indicated that people eat out around 5.5 times per month on average (R.H.S.C. 2007).

Considering the amount of people available and accounted for in this study, this is more than enough consumers to keep the doors open at every restaurant across the map. The study also indicated some interesting results as far as consumers that continue their eating-out habits at specific locations only. Typical aspects, such as the freshness of food were of high reasoning for everyone. but, surprisingly, the most significant factor found common among all of the consumers that frequented restaurants was due to cleanliness. A clean atmosphere is believed to go hand-in-hand with clean food. Not surprisingly, second to this aspect is the value of portions to cost. Frequent patrons were found to attend specific locations more frequently as a direct result of periodical specials and overall cost savings.

Considering the results of this study, a detailed look into the current condition of our atmosphere must be done thoroughly. What may appear clean to one may be utterly inconceivable to another. This can be determined by inviting customers to fill out satisfaction cards. The comments and feedback that comes form this type of questionnaire and response is usually a very accurate way to establish customer rapport since they can be done anonymously.

Implementing these questionnaires, and urging customers to reply, will allow a determination of the outward opinion of our establishment within several weeks. All characteristics of the restaurant can be listed within each questionnaire, including food quality and freshness, prompt service, atmosphere, convenience, and any other aspect contributing to their overall experience with our establishment.

Another interesting component in the survey done by Restaurant Hospitality Service Company that showed an influence on patron's decision to frequent specific restaurants came in the way of brand choices, such as Heinz or Coca-Cola. Consumers appeared to be very inclined to restaurants that have a selection of name brand condiments, refreshments, and other such products. This would imply a higher potential available through the offering of name brand products. Though the price of name brand products may be higher than off name products usually purchased in bulk, the possibility of increasing patrons will undoubtedly offset the ratios concerning this modification in prices.

Another method that can be utilized to increase the customer base is similar to the methods of reward that will be implemented for stabilizing the staff. Many restaurants already offer patrons a free meal as a reward for previously purchasing any different number of meals (B.I.M. 2007). This type of offer creates a predisposed notion with customers that they should return in order to get what they will eventually earn. Punch cards are often a very common way of implementing these types of programs for patrons. However, in a more tactful manner, having a hostess database that keeps record of certain patrons frequency has been a more popular method among dine-in restaurants. This tactic can increase the potentials for repeat customers.